A cGMP phosphodiesterase was extracted from bovine rod outer segments by suspension of rod outer segments in hypotonic medium and further purified by chromatography on AcA 34. Enzyme activity was markedly increased by trypsin; activity was also increased severalfold in the presence of NAD and a mono-ADP-ribosyltransferase from turkey erythrocytes. Activation by trypsin resulted in an increase in Vmax and decrease in Km for cGMP; ADP-ribosylation was accompanied by an increase in Vmax. Activation by trypsin is thought to be related to destruction of a small heat stable inhibitory subunit associated with the holoenzyme. This subunit was prepared by chromatography on Sephadex G-50 of a purified, heat-treated ROS cGMP PDE preparation. Incubation of this inhibitor, NAD, and purified transferase reduced the capacity of this material to inhibit trypsin-activated ROS cGMP PDE; incubation with (P32)ADP and transferase resulted in (P32)NAD-ribosylation of the inhibitor. These findings are consistent with ADP-ribosylation of the inhibitory subunit resulting in increased activity of the ROS cGMP PDE.